Low Cost

Conference Board says low cost air travel possible in Canada

EDMONTON – A new report suggests above average economic growth across Western Canada in recent years has created the right conditions for another shot at super low-cost air travel in the region.

The report published Wednesday by the Conference Board of Canada says the number of air travellers in British Columbia and Alberta is growing at a faster clip than other regions thanks to a brisker pace of business activity.

The report says the brighter prospects have created the right context for the launch of new carriers, especially in the “ultra-low cost” segment, which remains essentially nonexistent in Canada.

Super low-cost air travel is widespread in Europe, Asia and routes spanning the United States, but the model has struggled to sustain itself here.

The fresh vote of confidence comes as up to three new lower cost airlines prepare to launch services.

Jetlines and Jet Naked are two ultra low-cost startups hoping to open up routes as early as next year while U.S. carrier Southwest has also said publicly it intends to add flights north of the border.

Jetlines president David Solloway has said his company is seeking financing to help it begin offering airfares on routes beginning next spring. The Vancouver-based airline plans to launch initially in western provinces.

“Both 1/8Jetlines and Jet Naked 3/8 are planning to fly to domestic and sun destinations … at prices that are a fraction of those currently advertised by Air Canada and WestJet,” says Kristelle Audet, who wrote the report for the Conference Board.

The carriers plan to slash ticket prices by unbundling every service that’s typically rolled up into an airfare, reducing the base cost and charging extra for everything else, including luggage, snacks and upgraded seating.

“Basically you purchase a seat and seatbelt,” Solloway has said. “It’s a very strict business model. The whole focus is to provide safe, comfortable jet service to Canadians at the lowest possible price.”

Tightly packed flights as well as non-unionized staffs that aren’t paid as much as workers at Air Canada and WestJet will also keep prices way down, Audet suggested.

Flying just a few routes that aren’t dependent on connecting flights is another means of lowering the ticket price, experts say – simple point-to-point flights in a handful of destinations.

Still, the ultra low-cost approach of Jetlines and Jet Naked carries big financial risks, the report said, echoing other experts who are uncertain about the viability of the model in Canada.

“In the past, this strategy has proven difficult to implement in Canada,” Audet said.

“Even WestJet has moved away from the low-cost strategy that characterized its operations in its early days.”

WestJet said this week it will begin charging $25 on economy passengers for their first bag of checked luggage, a move experts say Air Canada is likely to match.

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